Coal supporters see reign lasting, despite challenges

Mike Riggen, president of the King Coal Association, looks over invoices from the 2014 King Coal Show. - Tara Kinsell / Observer-Reporter
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With the 61st annual King Coal Show completed, Mike Riggen is resolute about maintaining the regal association to an industry that has had its throne shaken over the past year.

“We’re going to keep promoting the coal industry and hope that it recovers,” said Riggen, who is president of the six-decades-old event in Carmichaels.

Like others in the industry on this Labor Day weekend, Riggen is maintaining an upbeat outlook for the fuel, despite recent developments. They include:

• In June, the Environmental Protection Agency, acting under President Obama’s Climate Action Plan, proposed a plan to cut carbon pollution from existing coal-fired power plants. The agency said it is the largest source of carbon dioxide emissions in the United States, making up about one-third of all domestic greenhouse gas emissions. The goal of the plan is to cut carbon pollution from the power sector by 30 percent by 2030.

• The Climate Action Plan estimates eliminating carbon pollution from plants would generate public health and climate benefits worth an estimated $55 billion to $983 billion per year by 2030, far outweighing the costs of implementing it, pegged at $7.3 billion to $8.8 billion.

• While it could take as long as three years for the EPA’s rule to be enacted, the area has already seen two coal-fired plants close within the last year – Hatfield’s Ferry Power Station in Greene County and Mitchell Power Station in Washington County, which resulted in the loss of 380 jobs in October.

• Weak market conditions were blamed when Alpha Natural Resources announced Aug. 6 it would close its Emerald Mine in Waynesburg by the end of 2015. The company also said the mine, which employs about 500 workers, was nearing the end of its mineable reserves, and said most of the miners would be able to transfer to its Cumberland Mine, also in Greene County, where Alpha plans to increase production.

• That announcement followed by one week the news Alpha plans to lay off 1,100 workers at its West Virginia mines by mid-October, citing market conditions and federal regulations.

Always a market

As far as the region’s coal industry is concerned, there was at least one bright spot in what was otherwise a dismal summer.

On June 24, Consol Energy dedicated a new mammoth coal mine near Sycamore, Greene County – the largest in North America – christening the $700 million project with a new name in honor of its executive chairman, J. Brett Harvey.

During remarks from company officials, Jimmy Brock, chief operating officer for Consol’s mining division, was bullish on the project, despite the EPA’s proposed regulations.

“We believe there’s always going to be a market for coal-fired generation,” said Brock, who acknowledged that it remains to be seen what percentage of the energy mix coal will have in the future.

At present, coal accounts for 39 percent of power generation in the United States and 40 percent in Pennsylvania.

For that reason, Riggen, who is retired from First Energy’s Lake Lynn hydroelectric station, believes coal will remain a part of the energy mix for years to come.

“There’s no way that solar, wind and hydro are going to take the place of that,” he said, noting when Hatfield’s Ferry was in operation, it put 1,500 megawatts of “cheap” energy on the grid.

United Mine Workers of America spokesman Phil Smith acknowledged last week there are a lot of factors at work, “both from an economic and from a regulatory standpoint” that are having a negative impact on coal.

“We think there will still be a role for coal” in the future, he said, predicting that prices will move upward again, but probably not until late 2015 or early 2016.

As for the long-term view, he noted the extent to which countries such as China and India rely on importing the fuel for generating electricity, adding that coal’s viability as a fuel for electric generation will remain strong for at least the next 10 to 15 years.

Pippy a prominent proponent

John Pippy, chief executive officer of the Pennsylvania Coal Alliance, upped the ante on Smith’s projection.

“In three years, the power demand for coal globally will make it the No. 1 source of electricity.”

Pippy’s organization, according to its Facebook page, is an initiative that strives “to educate the public and policymakers about the coal industry in Pennsylvania.”

That process, he said, is fraught with challenges. Not only is coal dealing with a drop in demand and the ominous shadow of strict environmental regulations proposed by the EPA, it also has a bad image. Coal is infamous for CO2 emissions, widely regarded as the major culprit in global warming and climate change.

Pippy, a former Republican state legislator, said that image has been exaggerated by misinformation or lack of information.

“Those opposed to coal look at what it was two or three generations ago,” Pippy said last week. “Coal is safer, cleaner and burns cleaner than ever before, and we’re working really hard to get that message out.”

That message, according to PCA’s website, betterwithcoal.com, includes these Pennsylvania statistics:

• The coal industry has a $4.1 billion impact on the commonwealth’s economy;

• 80 percent of state-mined coal is used for energy;

• About 36,100 are employed in the industry statewide.

Like Pennsylvania Gov. Tom Corbett, Pippy is an advocate of a diverse portfolio of energy resources that includes coal. He said it is an integral element of that portfolio statewide, nationally and globally.

The proposed regulations, however, threaten the industry. A number of legacy coal-fired power plants, like Hatfield’s Ferry and Mitchell, have been closed and others undoubtedly will be shuttered in the future.

These closures and those likely pending concern Pippy, who, like millions of other Pennsylvanians, endured a miserable winter of 2013-14, when plant shutdowns imperiled the energy grid.

“As coal-fired power plants shutter prematurely,” Pippy said, “we will see whether a shortage occurs if we have another frigid year. It’s very realistic.”

Turning its back on coal

Pippy blamed the federal government – i.e., the Democratic administration of Barack Obama – for “literally turning its back on coal.”

While Smith said the union plans to hold political candidates accountable for keeping coal as part of the energy portfolio, he acknowledged that in the case of the EPA’s proposed regulations, “nobody’s going to get to vote, not even members of Congress” on the final rules.

While it may be difficult to fight what’s coming in the way of stricter rules, the industry may have the markets on its side to ensure that coal remains king for a while longer.

“We say coal is part of the (Pennsylvania) portfolio that includes the growth of natural gas and nuclear, and growing renewables,” Pippy said. “But renewables are only 2 percent of that portfolio.

Michael Bradwell has been business editor for the Observer-Reporter since 1995, and was named editor of The Energy Report in 2012. He joined the newspaper in 1990 as a general assignment reporter in the Greene County bureau and has also worked as a copy editor. A 1974 graduate of Pennsylvania State University with a degree in English, he began his career at the Bedford (Pa.) Gazette. Prior to joining the O-R, he served as public relations director for Old Bedford Village, account executive at two Pittsburgh public relations agencies and copywriter for the country’s largest wholesaler of mutual funds.

Rick Shrum joined the Observer-Reporter as a business reporter in 2012. Previously, he was a section editor, sports reporter and copy editor at the Pittsburgh Post-Gazette. Rick has won numerous awards, including a Golden Quill, an O-R staff Golden Quill award, and four other writing awards during his 40 plus years working for daily newspapers. A lifelong Pittsburgher, he is a graduate of the University of Pittsburgh.